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Scott Wachsler
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I manage Wax, a baseline equity research company comprised of individual investors not licensed or registered with any government agency. I have been all cap value investor and independent equity researcher for the past 30 years, and believe that patience is the key to successful... More
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Wax Ink
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  • Forum Energy Technologies - Leaning On The Lectern 0 comments
    Jan 5, 2014 10:44 AM | about stocks: FET

    Forum Energy Technologies, Inc. - (Reviewed 01/05/2014)
    Forum Energy Technologies (NYSE: FET) - Hold based on a recent price of $26.18 and a fair value estimate of $36-$42.

    The company is an oilfield products company, serving the subsea, drilling, completion, production and process sectors of the oil and natural gas industry formed in the summer of 2010 in a five-way merger among Forum Oilfield Technologies, Triton Group, Subsea Services International, Global Flow Technologies and Allied Technology.

    It appears that 2012 may have been a turning point for the company with a near 40% reduction of debt and a 37% y-o-y increase in free cash flow. At the end of fiscal 2012, the debt to net fixed asset ratio stood at 2.75, which I found more than respectable given that 50% of total assets consist of goodwill and intangibles.

    Over the past year the stock price has increased roughly 6% while revenue increased 25% and earnings grew 43%. Add to this that short sale days to cover is running at 4.3, and it just makes me think that the markets don't quite know what to do with this stock at the moment.

    Recent articles by noted web authors made the argument that the company may have an uphill battle since its surface market competes directly with Cameron International, the world leader in the surface field.

    Wrong, wrong, wrong. Cameron is the world leader in desalter technology, a completely different animal. But hey, don't confuse us with the facts.

    The company also recently completed a $100 million private placement bond offering intended to reduce borrowings from its revolving credit line, which will place the company in a good position to grow its various businesses in fiscal 2014.

    Recent announcements regarding an upgrade of the company stock were I thought, initially promising. But then I realized the announcement was from FBR Capital, the same company that downgraded the stock in October of 2012, then upgraded it in February of 2013, highlighting, at least to me, how completely clueless the Wizards of Wall Street, truly are.


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Wax Ink is a baseline equity research company not licensed or registered with any government agency.

    Copyright © 2014 Wax Ink

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: Top Ideas Stocks: FET
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